The submarine electrical interconnection project between Spain and France through the Bay of Biscay it is becoming more expensive due to the sharp rise in prices of materials for the construction of a cable that will link the towns of Gatica, in the Basque Country, and Cubnezais, north of Bordeaux. With a length of almost 400 kilometers (13 kilometers on Spanish land; 80 kilometers in French territory and 300 under the sea) the project, which consists of two 400 kV lines, will mean increasing from 3% to 5% the interconnection capacity between the two countries: from the current 2,800 MW to 5,000 MW.
The infrastructure, which they will undertake Spain Power Grid (REE) and its French counterpart Résseau de Transport d’Electricité (RTE), through the joint venture Inelfe, started in 2017 (the year of the first consultations) with an investment of 1,750 million euros. Already in 2019, the budget increased to 1.950 milliondue to the instability in the Capbreton Canyon, which forced a change in the route.
At the moment, with the international price crisis (it is estimated that the materials used for the cable, such as aluminum or nickel, have skyrocketed between 30% and 40%), the situation has worsened to the point that the extra cost of the project exceeds 40% (between 700 and 800 million euros more) and over 50% compared to the initial investment. In total, the cost at this time would add 2.7 billionaccording to industry sources.
All this without the works having started yet, since the project is in the phase of administrative authorizations, and in the midst of a hard struggle between the sectoral regulators of both countries (the National Commission of Markets and Competition –CNMC– and the Commission de Régulation de l’Energie –BELIEVE-) on the financing of the incidental cost. The power of the project corresponds to both organizations since the energy interconnections are regulated assets whose investment it is paid by consumers on your invoice (via tolls) and is paid to carriers, REE and RTE.
In its day, the distribution of the cost of the interconnection was already controversial, despite the fact that in 2013 the European Commission and Parliament declared it Common Interest Project (PIC) and subsidized 30% of the investment. After an intense refirrafe, Spain assumed 43% of its funding and France the 27th% remaining, on the basis that Spanish consumers would benefit from the savings by 65% and French consumers by 35%. Percentages that, even then, were questioned by some experts.
At the moment, Brussels does not want to contribute more funds and the French regulator refuses to contribute more than the stipulated third, since the agreement establishes that Spain would take charge of 60% of the deviations.
Political sources indicate that the CNMC does not give up receiving new community subsidies (from the new anti-crisis funds) and tries to convince its French counterpart that circumstances have changed and you have to change those percentages. If the initial objective was to import more electricity from France, now, with the problems that its nuclear park is dragging, the situation has evened out, and even the balance of purchases is tilting towards France.
Urgency
While the parties continue to argue, time is pressing. Business sources fear that the lack of ships dedicated to launching marine cables and the waiting lists for the supply of materials could delay the start-up of the connection for several years (It’s already been overdue for two years.) Once the authorization period is over, in 2023, the supply and construction of the infrastructure will open, which would end in 2026. Already in the following year, 2027, the tests would be carried out and it would start up.
Sources close to REE assure that the Spanish side is about to receive the Environmental Impact Statement (DIA), which the Ministry for Ecological Transition would grant before the end of this year. The DIA by the French Government is further behind.
Although there is no shortage of those who continue to defend that interconnection is positive for Spain, there is fear that the Spanish consumer will assume a cost that is greater than the benefit they may receive.
A suspicious imbalance in favor of France
Controversy. The submarine interconnection between Spain and France was promoted, not without controversy, by the Government of Mariano Rajoy. According to the studies that supported the project, the cost of the investment was higher in the French section, 1,191 million euros, than in the Spanish section, 559 million. However, given that the benefit was greater for the Spanish consumer than for the French one, Spain took over 43% of the financing and France 27% (the rest would be subsidized by the European Union).
Imbalance. The analysis thus revealed that the cost-benefit was highly unbalanced: 68% of the investments were made in France and 32% in Spain, while 35% of the benefits were for the former and 65% for the latter, “because the Peninsula is a peripheral zone of Europe”.
Warranty. In order to balance this, to the so-called congestion rents for the purchase of energy on both sides of the border, a saving for guarantee of supply of 40 million euros per year distributed equally was added, which, according to the experts, was meaningless and It was only explained so that the accounts came out in favor of France. Now, with the extra cost of the project, the imbalance has been reversed.
